GE's balance sheet is the cause of its demise: Bob Wright
General Electric, once the most valuable company in America, is on the verge of collapsing and its former chairman says the downfall is due in part to GE’s debt-riddled balance sheet.
“Somehow or other, we lost our and I say our, because I never can quite pass it, they just lost our bearing in dealing with the balance sheet and those insurance liabilities should have been dealt with,” Bob Wright told FOX Business’ Neil Cavuto on Wednesday.
GE has seen its stock value fall below the $8 mark for the first time since the financial crisis on Monday and down nearly 18% for the month of November.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GE | GE AEROSPACE | 181.15 | +2.45 | +1.37% |
Wall Street has become weary of the 126-year old company as GE scrambles to develop a restructuring plan. Wright, who was elected Vice Chairman of GE in 2000, said the hiring of Jeffrey Immelt may have contributed to GE’s demise.
“Immelt was trying to reduce the impact of GE Capital. But at the same time, we have to deal with a number of outside issues,” he said. “The collapse of the bubble in power, which was Enron, this kind of phony power shortage in America, which didn’t actually exists.”
GE Capital was once considered the company’s financial-services powerhouse handling all sorts of financial transactions.
Wright said GE’s greatest asset is its reputation throughout the world which can be its saving grace.
“You have to think that GE has another asset that’s very hard to value, but can’t be replaced. GE has a great population out in the entire world. They’ve done business everywhere for 80, 90 years,” he said.